The Surety market is continuing to recover following a period of elevated claims activity and tighter underwriting conditions. Prior to the recent insolvency of Ardmore, the UK Surety market had recovered well after the previous few years, with claims/losses having returned to levels that do not exceed the probable maximum losses that Sureties might reasonably expect. Underwriting criteria remains tightened and we have seen the Sureties requesting tighter indemnities. There are still precautionary measures being taken, but we are seeing some more positive responses. However, with the insolvency of Ardmore likely to result in potential losses to the Surety market of up to GBP100 million, this may slow this recovery and result in the positive responses being curtailed to a degree due to a knock in confidence in the market recovery. The tightened criteria and indemnities are likely to remain in place for the foreseeable future.

As the Sureties require a certain level of information to be able to provide the best terms, we always recommend that information is sent to us as soon as possible and with enough time for the Surety to review the information before the contract start date. With this latest high-profile insolvency, this remains as important as ever to keep the placement of any bonds as smooth as possible.